Cyanotech announces first quarter financial results of fiscal year 2014

Cyanotech CorporationAug 12 2013

Cyanotech Corporation (Nasdaq Capital Market: CYAN), a world leader in microalgae-based, high-value nutrition and health products, today announced financial results for the first quarter of fiscal year 2014, ended June 30, 2013.

“First quarter results keep us on track to achieve our full year objectives.”

First Quarter 2014

For the first quarter of fiscal 2014 compared to the first quarter of fiscal 2013, net sales were $6,909,000 compared to $6,506,000, an increase of 6%. Gross profit was $2,852,000, with gross profit margin of 41.3%, compared to gross profit of $2,574,000 and gross profit margin of 39.6%. Net income was $30,000 or $0.01 per diluted share, compared to net income of $493,000 or $0.08 per diluted share.

After having recognized a $2,021,000 tax benefit during the quarter ended March 31, 2013 from the release of a valuation allowance against deferred tax assets, the Company now recognizes a provision for income taxes. As a result, the Company's effective tax rate increased during the quarter ended June 30, 2013. Pretax income for the first quarter was $136,000 compared to $503,000 for the first quarter of fiscal 2013.

Regarding the first quarter of fiscal 2014 results (changes shown versus the first quarter of fiscal 2013), Brent Bailey, President and CEO, stated, "First quarter results keep us on track to achieve our full year objectives.

"Total company net sales growth in the first quarter was a modest +6%. However, our consumer products business (Nutrex) grew +44% and accounted for 55% of net sales in the quarter:

"Retail sales growth of our Astaxanthin products in the U.S. natural products channel was +84% with market share of 52.8% (+21.8 pts.). Our Spirulina retail dollar growth for the quarter was +39% with a market share of 48.8% (+7.3 pts.). Continuing the focus on building our consumer packaged business, we recently began a test of our Hawaii marketing plan in a West Coast market. Initial results have been very encouraging, with growth more than 40% greater than the remainder of the country after the first two months.

"Operating income for the first quarter met our expectations and was impacted by the cost of the West Coast test market, as well as the costs associated with the people and infrastructure investments that were begun in fiscal 2013 and which are driving the strong topline growth we are seeing in our consumer business. Additionally, legal fees increased compared to the first quarter of last year."

Trailing 12 Months

For the trailing 12 months ended June 30, 2013 compared to the trailing 12 months ended June 30, 2012, net sales were $27,984,000 compared to $25,187,000, an increase of 11.1%. Gross profit was $11,236,000, with gross profit margin of 40.2%, compared to gross profit of $10,244,000 and gross profit margin of 40.7%. Net income was $3,746,000 or $0.67 per diluted share, compared to net income of $3,639,000 or $0.65 per diluted share.